A monopoly differs from monopolistic competition in that
A) a monopoly has market power while a firm in monopolistic competition does not have any market power.
B) a monopoly can never incur a loss, but a firm in monopolistic competition can.
C) in a monopoly there are significant entry barriers, but there are low barriers to entry in a monopolistically competitive market structure.
D) a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve.

Question

Quizplus · Accepted Answer

In a monopoly, there are significant barriers to entry that prevent other firms from entering the market, whereas in monopolistic competition, there are low barriers to entry, allowing more firms to enter and compete.

A Monopoly Differs from Monopolistic Competition in That